Crye-Leike Has to Build from Scratch in Little Rock
Harold Crye continues to predict that his Crye-Leike, Realtors Inc. of Memphis will dominate home sales in central Arkansas as early as 2004, but it’s clear that the market has been a tough nut to crack.
Having been unable to find an established agency to buy – Crye-Leike’s usual method of entering a new market – the nation’s 10th largest realty chain has spent the past year building a Little Rock operation from scratch.
After establishing the company’s first Little Rock branch in May 2002, Crye told Arkansas Business, “Our strategic plan and goal is to be the market leader in Little Rock within the next three years by establishing six to seven offices in the metro area and recruiting over 300 sales associates.”
So far, the company has established two Little Rock offices – 11719 Hinson Road and 11300 Financial Centre Parkway – as well as one in Bryant that opened in lat May.
Last month, Crye-Leike (pronounced “cry-like) shelled out $550,000 to buy the 16,000 SF Park Hill Shopping Center at 3400 John F. Kennedy Blvd. in North Little Rock and announced plans to remodel 6,000 SF of it as offices for up to 45 sales associates. The two-building shopping center, which once housed the Park Theater, had been owned by Park Hill Baptist Church.
Although a specific timeline hasn’t been announced, Crye said he hopes to establish offices in Maumelle, along University Avenue in Little Rock and in Benton, Cabor and Searcy over the next few years.
“This will probably be the last year that local companies will lead in residential sales,” Crye said. “It will rotate after we get to a critical mass there in central Arkansas. It will probably be us in the foreseeable future. The reason I say that is because that’s the way it is in our other markets.” But Ken Gill, executive broker and relocation director at Coldwell Banker Advantage Realty in Little Rock, said Crye won’t be able to bully the area’s existing companies, which already have established niches.
“There’s not really a dominant company in this area. I don’t know why he thinks he can come in here and be so brash to say he can dominate the real estate industry,” he said. “There’s too many large, independent firms that already have a lion’s share of the market here.”
Crye said reception to the large real estate chain has been incredibly good, though he admits his march to dominance has been slower than some had hoped.
“Quite truthfully, our only slowdown is that I just can’t get to it as quickly as they want me to get to it,” he said. “And a lot of things take time. I’ve had agents wanting me in North Little Rock for over a year, and I’ve been looking [for a location] for over a year,” he said.
No. 11 Company wide, Crye-Leike employs more than 2,300 sales associates in 62 branch and franchise offices in Arkansas, Tennessee, Mississippi, Georgia, Kentucky and Florida.
Nationally, the company achieved sales of $3.17 billion in 2002.
Crye-Leike ranks 11th in the Arkansas Business list of the state’s largest producing real estate agencies, with $110.7 million in sales in 2002. That includes $16.1 million produced between August and December by the office on Financial Centre Parkway, according to Joyce Friedman, director of public relations for Crye-Leike; a smattering presumably came from the Hinson Road office that opened in December.
(By comparison, fourth-ranked The Janet Jones Co. of Little Rock produced almost $172 million in sales in Pulaski County alone last year. And No. 5 Adkins McNeill Smith & Associates Inc. racked up almost $122 million in central Arkansas.)
The remainder of Crye-Leike’s 2002 total was produced by the agency’s original Arkansas office, which opened in West Memphis in 1996; its Jonesboro operation, a the former White Realty Co. that Crye-Leike purchased in 1999; a franchise office, Crye*Leike Missco Realty, which opened in Blytheville in 2000; and fledgling company -owned offices in Hot Springs (November) and Conway (December).
Between January and April of this year, the Financial Centre and Hinson Road offices closed $24.5 million in sales, Friedman said.
More than 100 sales agents work under the Crye-Leike banner in Arkansas. About a quarter of them are in Jonesboro, where Crye said his crew remains second in sales behind Fred Dacus Associates, Realtors.
Crye’s goal is to bring in $150 million in sales by the end of this year and $200 million by December 2004, Crye said. That kind of success would likely push Crye-Leike into the top five statewide.
Eyes on the Prize. Crye, an Osceola native, first set his sights on Little Rock about six years ago. His company approached several existing real estate agencies – which Crye wouldn’t name – as a means of entering the metro area.
Finding no sellers, Crye and the company’s president, Dick Leike, shifted their focus to the Chattanooga, Tenn. market. In 1997, Crye-Leike acquired four offices of Huffaker, Realtors in Chattanooga and within two years had opened four more offices in the area.
By 2002, Crye-Leike was Chattanooga’s residential sales market leader, with $395.2 million in sales in 2002, a figure that Crye said his company can eventually surpass in Arkansas.
After establishing its presence in Jonesboro and Blytheville, Crye-Leike directed its attention again on the Little Rock, trying in early 2002 to buy one of the city’s larger real estate companies. But a near-deal with the unidentified company fell through by April last year, forcing Crye-Leike to either continue seeking a seller or build its presence from the ground up.
Still, no existing real estate agency would sell.
“Since it didn’t happen that we could buy someone, we decided to go in and open up one on our own,” Crye said. “We don’t have necessarily a preference, but sometimes I think we come out better not buying anybody.”
Crye-Leike was able to buy into the Hot Springs market last fall, acquiring Lakefront Real Estate in November and adopting its 13-person staff.
Fast-growing m northwest Arkansas hasn’t escaped Crye’s notice, but no plans have been made to establish offices there yet. Crye said he has his hands full with central Arkansas and doesn’t want to lose focus of this market’s potential success.
Lighting a Fire. Crye-Leike’s presence may turn out to be a positive for existing companies in central Arkansas, said Randy Alexander.
“It’s going to cause us to evaluate the services that we offer,” he said.
Crye said his company’s presence is already doing more than that for his competitors’ marketing and staff retention strategies.
Newspaper advertising by the smaller companies will continue to increase, he said, and in order to retain their sales forces, competitors will need to increase the share of the commissions that agents get to take home. Otherwise, he said, Crye-Leike may be able to entice top producers with its sliding commission schedule.
Some of that has already happened, of course. Betsy Arey, who in 2002 was a $7.7 million producer for Century 21 Daniel & Associates, Inc. of Benton, has joined Crye-Leike in Bryant. And John Rogers, who was a $7 million seller for Coldwell Banker Advantage in Little Rock in 2001, has joined Crye-Leike in Little Rock.
According to Crye-Leike’s Web site, new agents can count on a progressive split of at least 60 percent of their gross commissions, while top sellers can retain up to 95 percent.
Crye-Leike associates also are each given individual workspaces, even private offices for top producers. Crye-Leike doesn’t charge its agents monthly desk fees or franchise fees.
Jim Fore of Jim Fore Real Estate in North Little Rock said he welcomes Crye-Leike, even if it does raise the stakes.
“I think competition is always good and healthy for any business,” he said, adding that his company hasn’t prepared any defense again Crye-Leike’s move into North Little Rock. – END-